Ex-CMD of Indian Bank, 14 others get 1-year jail for illegally granting loans

Former Indian Bank Chairman and Managing Director M Gopalakrishnan and six other former top bank officials were sentenced to one year rigorous imprisonment by a CBI court on Saturday in Chennai for allegedly causing a loss of Rs 31.75 crore by granting loans without proper security between 1992-96.

Principal Judge for CBI cases S Malathy held them guilty of conspiracy, criminal breach of trust, misconduct and cheating under various provisions of the IPC and Prevention of Corruption Act.

Former Indian Bank Chairman and Managing Director M Gopalakrishnan and six other former top bank officials were sentenced to one year rigorous imprisonment by a CBI court on Saturday in Chennai for allegedly causing a loss of Rs 31.75 crore by granting loans without proper security between 1992-96.

The court also sentenced eight others, including one businessman, M Varadaraju, to one year RI in the case and imposed a total fine of Rs.4.5 lakhs on all the convicts. The Judge suspended the sentence enabling them to appeal.

The CBI case was that between 1992-1996, Gopalakrishnan and six other top officials of the bank abused their position as public servants and sanctioned loan facilities to one Sathyam Foods (of Varadaraju) without proper appraisal and security and caused a loss of Rs 31.75 Crores to the bank.

Economic Offences wing of the CBI had registered a case on May 2, 1997 charging the bank officials with providing the loan in the form of Foreign Bills purchase without proper appraisal.

The CBI further contended that the accused had sanctioned the credit facilities exceeding their delegated powers. The investigating agency had charged Gopalakrishnan and 14 others with criminal conspiracy, cheating and misappropriation of funds.

This is the second case in which Gopalakrishnan has been convicted of causing loss to the bank by sanctioning credit facilities without proper security.

On May 22 last, the CBI court convicted Gopalakrishnan and two others in an 18 year-old cheating case, for causing Rs three crore 'wrongful loss' to the bank and sentenced him and another person to one year Rigorous Imprisonment each.